Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
DIRECTORS’ REPORT FOR THE YEAR ENDED DECEMBER 31, 2011
paid for these bookings are recognised as a cost within the operating costs of the
business.
- Separately, the direct distribution bookings (“Own Bookings”) are bookings done by an
airline which uses the Altéa reservations module standalone (a System User) through
their own direct channel. The revenue generated from these bookings, charged per
booking, is also recognised within the direct distribution revenue line, but it is recognised
net of the distribution fee generated by the airline. For airlines belonging to certain
groups, bookings are considered as Own Bookings, and therefore recognised net of
distribution costs.
- In 2011, we registered as Own Bookings certain bookings that were considered as Other
Airline Bookings in 2010, and therefore have lower net revenue, which is not comparable
to the same period in 2010.
7. Other Additional Information
7.1 Expected Business Evolution
Amadeus is a leading technology provider and transaction processor for the global travel and
tourism industry. Our business model is transactional and volume driven. We charge our
clients - airlines and other travel providers - a fee per transaction (mainly bookings made by
online and offline travel agencies connected to the Amadeus system or passengers boarded
by airlines using our IT solutions). Our business and operations are therefore dependent on
the worldwide travel and tourism industry, which is sensitive to general economic conditions
and trends.
Despite the backdrop of a very challenging global macroeconomic and financial situation in
2011, Amadeus demonstrated the resilience and profitability of its business model, delivering
both top line growth – driven by the good performance of the air traffic industry and our
significant market share gains in both businesses - and margin expansion.
The economic outlook is still subject to significant volatility and uncertainty. 2012 faces a very
severe sovereign crisis in Europe, significant debt concerns in the US, slowdown in global
GDP growth including some of the strongest economies, higher unemployment, etc.
However, based on the above mentioned resilience of our business model, as well as the
visibility and recurring nature of both our business lines, Amadeus expects to continue to
deliver growth and profitability in 2012. Indeed, we are confident that the different actions and
investments in R&D undertaken in previous years will allow Amadeus to continue to add new
clients in 2012. In addition, the expected migration of airlines to our technology platform,
Altéa, will support growth in our IT division.
The latest estimates provided by the International Monetary Fund (IMF), issued on January
24, 2012, point to a 3.3% global GDP growth in 2012, despite a mild recession in the euro
area economy. This indeed represents a downward revision, and the downside risks are
significant, but should support growth in air traffic demand. In turn, in December] 2011 the
International Air Transport Association (IATA) reported that it expects a 4% growth in
demand in air traffic passengers in 2012. Amadeus operates in 195 countries globally, with a
leading position in some of the highest growth areas such as Asia Pacific, Latin America and
47